How do I refinance a mortgage in Ontario?
Want to refinance your mortgage in Ontario and walk away with cash or lower payments before you sell in Georgetown? Here’s a direct, step-by-step plan that gets it done.
Why refinance matters for Georgetown homeowners and sellers
Refinancing can lower your monthly payment, pull out home equity for renovations or closing costs, and reorder debt so you keep more cash when you sell. For Georgetown homeowners — where buyers from the GTA push prices and timelines — doing the refinance right can be the difference between a clean sale and a stressful closing.
I’m Tony Sousa, a Georgetown realtor who helps homeowners refinance, prepare properties for market, and close deals without surprises. I work with mortgage brokers and lenders every day. Below are the exact steps I use with clients, the costs you must plan for, and the local realities that matter in Georgetown, Ontario.
The 60-second overview: What refinancing does for you
- Cut your interest rate and monthly payment (rate-and-term refinance).
- Take out cash from your equity for repairs, staging or closing costs (cash-out refinance).
- Combine debts into one payment, improving cash flow.
- Switch mortgage type or term to match your sale timeline.
If you’re selling soon, your priorities change: protect closing dates, understand discharge penalties, and decide whether to refinance now or wait until after sale proceeds arrive.
Step-by-step: How to refinance a mortgage in Ontario (clear, direct)
- Check your current mortgage contract.
- Find the maturity date, outstanding balance, and whether the mortgage is fixed or variable.
- Identify the prepayment penalty rules. For fixed-rate mortgages the penalty is usually the greater of three months’ interest or the Interest Rate Differential (IRD). For variable-rate mortgages it’s typically three months’ interest.
- Decide your objective.
- Lower monthly payment? Refinance for a better rate and term.
- Need cash for repairs or staging? Consider a cash-out refinance or a HELOC.
- Selling soon and need a bridge? Ask about bridge financing or a short-term mortgage product.
- Get current property value and proof of equity.
- Lenders will require a recent appraisal or automated valuation. I can help set up local comps in Georgetown to speed approval.
- Talk to a mortgage broker and your current lender.
- Brokers shop rates across multiple lenders and can show whether breaking your mortgage, switching, or porting it is cheaper.
- Ask your lender for a payout statement (mortgage statement with exact payoff amount and effective date). You need this for the lawyer handling your closing.
- Ask about LTV, mortgage default insurance, and the stress test.
- If the new mortgage will exceed 80% loan-to-value (LTV), lenders may require mortgage default insurance. That changes costs and qualification rules.
- Most lenders will still run a stress test on the new mortgage application.
- Calculate all costs BEFORE you commit.
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Prepayment penalty (IRD or 3 months’ interest).
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Appraisal fee, legal fees, title search and discharge fees, broker fees (if any).
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Potential mortgage default insurance if LTV > 80%.
Add these costs to the math. A small rate drop can be wiped out by a large penalty.
- Choose the right product and lock it in.
- If you’re selling in 30–90 days, consider a short-term or portable mortgage. Porting lets you move your mortgage to a new property without penalties in many cases.
- If you need cash now to get the house market-ready, a HELOC or a cash-out refinance could cover renovations. HELOCs are flexible and fast but often have variable rates.
- Coordinate with your realtor and lawyer.
- If you have a sale pending, give your lawyer the payout statement and the refinance paperwork early.
- Ensure closing dates align. The mortgage discharge must be complete for the buyer’s lawyer to register the sale.
- Confirm the payout and closing.
- On closing day your lawyer will request the mortgage payout, handle discharge, and register the new mortgage if you’re refinancing into a new product.
Local realities for Georgetown sellers (what I see every week)
- Timeline matters: Georgetown listings sell quickly when priced right. You need mortgage payoff numbers in hand before you accept an offer.
- Transit and growth drive buyer demand. Homes near the GO station or with commuter access attract faster offers; quick, targeted renovations can deliver outsized ROI — which refinancing can fund.
- Lender familiarity matters. Local lenders and brokers know Halton Hills property values and can speed appraisals or provide desktop valuations.
If you sell without confirming the payout and discharge timeline, you risk a closing delay. I make that risk zero for my clients by coordinating lender, lawyer, and buyer agent weeks before closing.
Costs to expect (high-level)
- Prepayment penalty: either 3 months’ interest or the IRD (fixed rate) — get the payout statement.
- Appraisal: $250–$600 (varies by property type).
- Legal fees and disbursements: $500–$1,200.
- Mortgage default insurance: only if LTV > 80% and the lender requires it.
- Misc: admin fees, title insurance, discharge fees.
Always compare the penalty you’ll pay now vs interest savings and the cash you receive.
Common refinance products and when sellers use them
- Rate-and-term refinance: Lower monthly payment before sale or to improve net proceeds.
- Cash-out refinance: Pull equity to pay for renovations, staging, or to cover a down payment on a new place.
- HELOC: Quick access to funds for short-term projects; pay down at sale.
- Bridge financing: Short-term loan to span a sale and buy.
- Porting mortgage: Move mortgage to a new home if you’re buying after selling and your lender allows portability.
How I help Georgetown sellers get the best outcome
I assess the numbers, estimate the prepayment penalty, and then map three plans: keep current mortgage, break and refinance, or use a short-term bridge/HELOC. I coordinate with mortgage brokers and lawyers so your sale closes exactly on time. That removes stress and protects your net proceeds.
My clients benefit from local comps for appraisal, proven staging budgets, and lender contacts who understand Halton Hills pricing. If you want real numbers for your property, I’ll run the payout math and show you the exact net effect on your sale proceeds.
Email: tony@sousasells.ca | Phone: 416-477-2620 | Website: https://www.sousasells.ca
FAQ — Refinancing mortgages in Georgetown, Ontario (for home sellers)
Q: Can I refinance while my house is on the market?
A: Yes. But coordinate timelines. Lenders need valuation and documentation; your lawyer needs a payoff statement. If funds are for renovations, a HELOC is often fastest.
Q: Will refinancing delay my closing?
A: It can if payout statements, discharge instructions, or registration are late. Avoid this by ordering the payout statement and sharing it with your lawyer immediately.
Q: What will my prepayment penalty be?
A: For fixed-rate mortgages, the penalty is usually the greater of three months’ interest or the Interest Rate Differential (IRD). For variable rate mortgages, typically three months’ interest. Ask your lender for the exact payout figure.
Q: How much equity do I need to refinance or pull cash out?
A: Lenders generally allow refinancing up to a percentage of your home’s value. If your new mortgage exceeds 80% LTV lenders may require mortgage default insurance which increases cost and affects approval.
Q: Should I get a HELOC or a cash-out refinance before selling?
A: HELOCs are flexible and fast for short-term needs like repairs and staging. Cash-out refinance makes sense if you want a lower fixed payment and need larger cash sums. If selling in weeks, HELOC often wins.
Q: Can I port my mortgage when I buy another house after I sell?
A: Many lenders allow porting. Portability avoids penalties and keeps your rate. Confirm specifics with your lender — portability rules and timelines vary.
Q: Will refinancing affect my taxes?
A: Refinancing itself is not taxable. Interest on a mortgage used for investment income could have tax implications. Check with an accountant for personal advice.
Q: What if my buyer’s closing date moves?
A: Keep communication open. Your lawyer can request a payout statement with a later effective date. Coordinate with buyer’s lawyer and lender to prevent a registration gap.
Q: How fast can I refinance in Georgetown?
A: With a mortgage broker and a local appraisal, you can get approval and funds in 1–4 weeks. HELOCs and bridge products can be even faster.
Q: Who pays the discharge fee?
A: The seller usually pays the mortgage discharge fee and legal costs associated with closing the sale.
If you’re selling in Georgetown and need precise payoff math or a clear plan to refinance, call or email me. I’ll run the numbers, coordinate with lenders, and make sure your sale closes on time with the best net proceeds.
Tony Sousa
Georgetown Realtor
tony@sousasells.ca | 416-477-2620 | https://www.sousasells.ca
